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Allmerica Financial Corporation Announces Second Quarter Storm Losses


WORCESTER, Mass., May 21 /PRNewswire-FirstCall/ -- Allmerica Financial Corporation (NYSE: AFC) announced today it has incurred approximately $19 million in pre-tax catastrophe losses to date in the second quarter. The losses are primarily the result of hail, high winds, and tornadoes, principally in the Midwest and South from April 1 through May 11, 2003. Combined with the $11.2 million in pre-tax catastrophe losses incurred in the first quarter, the company estimates that year-to-date pre-tax catastrophe losses for 2003 have been approximately $30.2 million.

Allmerica assumes a certain amount of annual catastrophe losses when it develops its annual budgets, and for 2003 such losses were assumed to be approximately three percent of assumed premium for the year. This level of assumed catastrophe losses varies by quarter due to seasonal variations in expected loss patterns. The $19 million of pre-tax catastrophe losses incurred to date in the second quarter approximates the assumed amount for the full second quarter, and the year-to-date pre-tax amount of $30.2 million is below the assumed level for the first and second quarters of 2003 combined.

Historically, Allmerica has only reported the effect of catastrophe losses between scheduled earnings announcements when the company has incurred significant losses from a single event or a series of related events. However, given the attention the severe storms have received over the past few weeks, the company has decided to share this information at this time. In the future, the company expects to adhere to its historical practice of disclosure with regard to catastrophe losses between reporting periods.

Allmerica Financial Corporation expects to announce its second quarter financial results on Monday, July 28.

Certain statements in this release may be considered to be forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Use of the words "believes", "anticipates", "expects" and similar expressions is intended to identify forward-looking statements. Assumed quarterly and annual catastrophe losses constitute forward-looking information, as do estimated losses which are subject to further development. The Company cautions investors that any such forward-looking statements are not guarantees of future performance, and actual results could differ materially. Investors are directed to consider the risks and uncertainties in our business that may affect future performance and that are discussed in readily available documents, including the Company's annual report and other documents filed by Allmerica with the Securities and Exchange Commission and which are available at http://www.allmerica.com under "Financial News". These uncertainties include the possibility of adverse catastrophe experience and severe weather, adverse loss development and adverse trends in mortality and morbidity, changes in the stock and financial markets, changes from assumed surrender activities and assumed stock market returns, adverse selection in surrender patterns, investment impairments, heightened competition, adverse state and federal legislation or regulation, financial ratings actions, and various other factors, including the effect of the Company's restructuring actions.

Allmerica Financial Corporation is the holding company for a diversified group of insurance and financial services companies headquartered in Worcester, Massachusetts.

SOURCE  Allmerica Financial Corporation
    -0-                             05/21/2003
    /CONTACT: Investors: Henry P. St. Cyr, +1-508-855-2959,
hstcyr@allmerica.com, or Media: Michael F. Buckley, +1-508-855-3099,
mibuckley@allmerica.com, both for Allmerica Financial Corporation/
    /Web site:  http://www.allmerica.com/

CO:  Allmerica Financial Corporation
ST:  Massachusetts

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1769 05/21/200316:09 EDThttp://www.prnewswire.com

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